NEO Council Monthly Report – October

I always write this monthly report with big
excitement, but this time with a bit more excitement than usual. We have
had plenty events and progress during October, some of them marking
important milestones.

First of all, Red Pulse held the first token sale ever on the NEO
blockchain. As a first token sale, we are very happy with the stability
of the NEO blockchain while performing with reasonable transaction
speed. We had blocks with a few thousand transactions and average speed
of 28 tx / second. We never reached full load, and are looking forward
to more network traffic to prove our full performance.

The first token sale also helped us to identify areas to improve.
Firstly, there was confusion about the start of the second phase, since
time was communicated in clock time and not block time. We ask both
users and projects to pay attention to this detail for future
development and usage of smart contracts; the block time is the time
previous block was created +15 seconds. Secondly, the refund process was
far from optimal. We are implementing a solution for instant refund to
make it a better experience.

The second milestone is the unlocked funding. The 50 million owned by
NEO Council is now available and can be used to fund our ecosystem. Of
these 50 million, 35 million will stay in the contract and 15 million
will be available following the plans in the whitepaper:
http://docs.neo.org/en-us/inde...

We are greatly looking forward to see new community projects and
reward accordingly. We have more than enough funds to do so. We receive
plenty of requests from people asking for NEO in order to do this or
that; this is not how we intend to distribute NEO. In
principle, we reward after contribution. If you have a larger project
and are unable to fund it, then please join our community Slack. City of
Zion reward community members in Slack on weekly basis.

Some projects have already been or will be rewarded (from previous funds):

City of Zion, community managers and developers, has been rewarded pools of NEO to distribute among community contributors.

Neotracker.io, has received a one-time reward.

Antcha.in, has received a one-time reward

Antchain.xyz, has received a one-time reward

Dean, creator of NeoNewsToday, will receive quarterly rewards to keep up his good work.

Shargon, Security expert, received a reward for security report on NEO project.

David, Security expert, received a reward for security report on NEO website

Coranos, freelance developer, is rewarded for Ledger development

Many smaller rewards for documentation, translations, meetup
organizing, community development, and other ecosystem assistance. All
of you are important, and too many to mention all by name.

Moreover, the funding of City of Zion has come to an agreement. City
of Zion have secured funding for five years, to be released once per
semester. This funding will give CoZ more freedom to reward and promote
community contributions that improves the NEO ecosystem. It will also
allow CoZ community members to work full time on NEO Smart Economy.

We at NEO Council are very grateful for the support from City of Zion
and look forward to grow our community together. We are also eager to
see the results from the CoZ dApps competition which ends at November
16th. At the moment, there are more than 30 dApps participating. For
more details, see here: https://cityofzion.io/dapps/1.

The third milestone is that the first NEP-5 token got connected for
trading on an exchange. The Chinese documentation on how to set up NEP-5
on exchanges is already completed, and we are now in the process of
translating it to English. We are also continuously working on the token
template and documentation to make it easier for developers.

Related to the third milestone, NEO also achieved a fourth one: NEO
is traded as main trading pair against RPX and GAS. This is a very
important first step in NEO being recognized as a main token and we are
welcoming more exchanges to follow suit.

The fifth, and last milestone for this month, is that NEO Council
announced our "NEO Sponsor Giveback Plan". NEO Smart Economy will be
world’s first ICO to offer full-amount giveback to all ICO Sponsors.
ICO, a highly-efficient yet controversial financing method has its two
sides. On the one hand, it may facilitate funding for blockchain
technology development and pool together the community force; on the
other, it makes it convenient for defrauders to perform illegal
fund-raising under disguise. We hope that the "NEO Sponsor Giveback
Plan" will set a good example for the community. The 50% NEO under the
management of NEO Council will not be used for the giveback, as it is
reserved for the development of community and ecosystem. Sponsors that
request giveback in NEO will receive it by NEO Council buying it back
from the market. More detailed information about the giveback can be
found here: https://neo.org/blog/details/3...

Roadmap Adjustments

NEO DevCon

NEO DevCon has its preliminary date postponed to January because of scheduling and visa related issues.

Decentralization of Consensus nodes

We experienced long block time at Saturday evening, Beijing time.
This coincided with RPX listing on Kucoin, and since this is the first
exchange to list NEP-5 tokens, we started to investigate the NEP-5
trading process to see why the block was delayed. There was however
nothing wrong with the NEP-5 trading, so we looked at the other event
which occurred around the same time: the unlocking of 15 million NEO for
ecosystem funding.

The 50 million locked NEO has never been “broken”, they were stored
as one entry of 50 million. Since the sum of NEO has not been divided
into smaller parts, all 50 million NEO was sent and 35 million was
returned as change (that’s how blockchain work). The problem that
occurred was that the 35 million was returned to a change address and
not to the original address. That change address was not set to vote as
the original address (votes are linked to address). This resulted in two
external nominees got selected as consensus nodes, and these consensus
nodes were offline. The issue was resolved by transferring the 35
million NEO from the change address back to the original address. The
problem was thus a human error and not a technical error.

It is far from optimal that a human error has this large impact, and
in the end, it boils down to lack of decentralization. Our original plan
was to start decentralize in Q1 2018. We are however growing faster
than expected and cannot accept the risk with being as centralized as we
currently are. The conclusion is that we re-prioritize and start the
process of decentralizing today. We believe that NEO community groups
and exchanges will be suitable to run consensus nodes; community groups
already know the technology, and exchanges are already running full
nodes with high uptime and monitoring. We welcome interested parties to
reach out to us on [email protected] A NEP to encourage voting will be presented in the coming weeks.

Presentation at the National Assembly Memorial Hall to audiences of
The (South Korea) Congressional Legislation Research Center and the Asia
(South Korea) Future FinTech Forum. Pictures below.

During our trip to South Korea, we were humbled by the great interest
in NEO and were positively surprised by the high knowledge about
blockchain technology among the Korean community. We see both interest
and market gap for NEO’s technology in South Korea, and it is a very
important market for us. We encourage our Korean-speaking community
members to join Slack and help us with both community growing and Github
translations.

As always, we are very grateful to have such an amazing community:
all of you reading this report. With the released funds, we are
extremely excited; these funds are reserved for you. We now have an
incredible opportunity to pick up the pace together with the community, to build a complete Global Ecosystem for Smart Economy.